Are you a member of Philippine Army Finance Center Producers Integrated Cooperative or PAFCPIC? Have you read the newest memo released last December 3, 2012? If you are a member and you want to further invest in this Military Financial Institution through Coop’s Share Capital and Preferred Savings Deposit (PSD), I believe this article is for you. I want to disseminate this information because it wasn’t mentioned or posted in their website.

PAFCPIC Control Measures

Last December, PAFCPIC officially released their memo regarding their new policies. It was a shocking news for everyone especially those who just started investing their money to Share Capital and Savings Deposit. The PAFCPIC Board of Directors has decided to implement three full control measures to regulate the amount of Capital Contribution or savings deposit of its members.

***Note: Preferred Savings Deposit (PSD) is different from the Regular Savings Deposit (RSD). PSD represents the blue passbook while the RSD represents the green passbook. PSD has a higher yield with a rate of 14% per annum compared to RSD with only 5% per annum. If you plan to to put your money from RSD to PSD, you should apply for it. Automatic Salary deduction for PSD is not allowed so you have to personally visit PAFCPIC to transfer your money from the green passbook to the blue passbook. Salary deduction is only allowed in RSD so your salary deductions go to this account. Only P10, 000 is allowed per month to either PSD or RSD.

It can be a little confusing but you have to know these facts if you want to maximize your dividend. You can invest your money to RSD as high as 1 Million unlike PSD.

On the other hand, if you’ve bought shares, it’s the Share Capital. It has the highest dividend with a rate of at least 20% per annum. You can only buy 100 shares per month. 1 share is equivalent to P100. It’s the king of all investment in PAFCPIC.

To continue, last April 1, 2013, PAFCPIC Preferred Savings Deposit (PSD) ceiling was reduced from P500, 000 to P450, 000.

Last July 1, 2013, it was reduced to P400, 000.

By October 1, 2013, it will be further reduced to P350, 000.

Secondly, it was officially decided that there will be stoppage of acceptance of additional Share Capital subscription from members who already have P10, 000 required capital.

It was implemented last January 1, 2013.

Lastly, issuance of Share Capital (SC) to new members and members who have not reached the P10, 000 required capital was limited. It was not specified how they will limit the said issuance but I think it will be the discretion of the members of the Board. It was implemented last January 1, 2013.

Is PAFCPIC Going Bankrupt?

I don’t believe it’s going bankrupt. These were just control measures to protect the Coop’s stability. More Filipino soldiers are investing through Savings Deposit but loan applications are dwindling. Meaning, there are lot of excess money that become unproductive. Fewer loans mean lesser dividends for the investors. Still, yields depend on the Coop’s profitability. They announced to have 22% per annum rate for the last 12 years.

I hope this will last longer.

What Shall I do with my Excess Money?

If you have extra money and thinking of other investments other than PAFCPIC, I suggest you invest it in AFPSLAI as capital contribution. The dividend rate is higher compared to PAFCPIC and most importantly, dividend pay-out is done quarterly. Mostly, soldier investors who have reached the capital contribution (CAPCON) limit in AFPSLAI turned their attention to PAFCPIC.

This is a nice move.

Remember, it’s good to put your money to several financial institutions with higher investment returns.

Forget investments to commercial banks if you don’t have emergency fund.

You can also try investing to Philippine Stock Market. It’s better than commercial banks if you are willing to become a full-time investor. Just look for reliable local stockbrokers. If you don’t have time, try online stockbrokers like COL Financial. It is the best online stockbroker in the Philippines. It’s so easy! Just invest a minimum of P5, 000 to start buying and selling stocks. Just remember, every investment has a certain degree of risks.

In the conclusion, this PAFCPIC memo bothered a lot of Filipino soldier investors including their dependents. I just hope the PAFCPIC Board members will do everything to disseminate their decisions to all the regular and associate members to avoid confusion. On the other hand, interest rates for loans might lessen to attract loan applicants. It’s still a win-win situation for both investors and borrowers.